Ikea defends staff pay freeze amid "significant" slump in sales

Ikea said its decision not to give staff a pay rise this year reflected its focus on protecting key workers’ livelihoods, as it battles “one of the most challenging times” in the company’s history.

It was responding to claims by the GMB union that 300 key workers at IKEA’s distribution centre in Fletton Parkway, Peterborough, were set to lose hundreds of pounds a year after it pulled out of the Living Wage pledge.

The union said key workers, who worked “diligently throughout the Covid pandemic”, would have been guaranteed a pay rise in January but would now be left out of pocket.

The GMB said Ikea’s decision to “ditch” its commitment to being a living wage foundation employer, revealed how shallow the company was.

But Ikea told motortransport.co.uk that the GMB’s accusations were inaccurate:

“We are not ditching it, we are simply pausing it,” said a spokesman. “The GMB are aware of this, we discussed it with them.”

The Ikea spokesman continued: “Over the last few months, we have been through one of the most challenging times in our history.

“Whilst we are optimistic about the future, our sales globally and in the UK over the last year were significantly down and show that we are not immune.”

He said its sales figures for the last financial year, running from September 2019 to August 2020, were down 4% globally and 10% in the UK.

The spokesman said: “We are operating in an environment that continues to be challenging and uncertain but our focus remains on protecting livelihoods for the long-term.

“That is why we have decided not to implement a pay rise this year, including any increase in the real living wage, and have agreed with the Living Wage Foundation to pause our accreditation.”

He added: “We are grateful to our co-workers for their continued dedication.”

However, David Shamma, GMB organiser, claimed Ikea’s online sales had surged this year: “GMB members at IKEA were classed as key workers throughout the pandemic, they risked their health for the company to keep running and in return they rightly expected IKEA to honour their commitment to a living wage for staff,” he said.

“Instead Ikea has decided to announce plans to drop its accreditation to the Living Wage Foundation and a pay freeze for 2021.

“That’s no way to treat loyal workers.”